Although the previous week John Lennon had decided to leave The Beatles, Allen Klein persuaded him to keep quiet in public. Nonetheless, on 20 September 1969 Lennon chose to tell the rest of the group.
Klein was in the process of renegotiating a new contract for the group with EMI/Capitol, and persuaded Lennon that it was in everyone's interests to deny that the dream was over, at least for a while longer. The new contract was signed by The Beatles on this day, just before Lennon revealed his plans to leave.
The Beatles' new contract
Since May 1969, Klein had been arguing for an improved royalty rate. The Beatles' financial situation was precarious, he said, and it was in EMI's interests to provide a better deal for them. The group had almost fulfilled the minimum terms of their existing contract from January 1967, having delivered numerous hit singles, the double Magical Mystery Tour EP, the double album The Beatles (White Album), the Yellow Submarine soundtrack, and the best-selling Sgt Pepper's Lonely Hearts Club Band.
The November 1968 release of the White Album had pushed EMI's share of the UK record market up from 28% to around 40%, and had accounted for more than £900,000 in retail sales. Furthermore, The Beatles were shortly to release Abbey Road, which put Klein in a strong bargaining position.
The Beatles' existing deal with EMI and Capitol gave them 17.5% of the US wholesale price - a considerable amount already. Klein was able to increase to 25%. He was able to argue that, should the label object, The Beatles would cease to record for them.
In return for the higher rate, The Beatles would deliver two new albums each year, whether as a group or individually, until 1976. Under the terms of the deal, new albums would earn 58 cents until 1972, and 72 cents thereafter.
Klein also gained Apple Corps the right to manufacture and sell The Beatles records in the US. EMI would retain the recordings, but Capitol would manufacture the releases on Apple's behalf. Apple would then profit from the difference between manufacturing and retail costs.
The new terms gave The Beatles the right, for the first time, to determine the ways in which their music was manufactured and sold. By 1971 the group's entire back catalogue was made available on Apple Records. The Beatles' personal incomes were greatly improved, and Apple was guaranteed a regular income until at least 1976.
The Beatles' meeting
The contract was signed on this day; despite his reservations over Klein, Paul McCartney added his signature along with Lennon and Ringo Starr. George Harrison was visiting his mother in Cheshire at the time, but signed the contract a few days later.
The meeting took place at Apple's headquarters in London's Savile Row. John Lennon used the opportunity to tell McCartney and Starr that he was leaving the group.
When I got back [from Toronto] there were a few meetings and Allen said, 'Cool it,' 'cause there was a lot to do [with The Beatles] business-wise, and it wouldn't have been suitable at the time. Then we were discussing something in the office with Paul and Paul was saying to do something, and I kept saying, 'No, no, no' to everything he said. So it came to a point that I had to say something. So I said, 'The group's over, I'm leaving.' Allen was there, and he was saying, 'Don't tell.' He didn't want me to tell Paul even. But I couldn't help it, I couldn't stop it, it came out. And Paul and Allen said they were glad that I wasn't going to announce it, like I was going to make an event out of it. I don't know whether Paul said, 'Don't tell anybody,' but he was damn pleased that I wasn't. He said, 'Oh well, that means nothing really happened if you're not going to say anything.' So that's what happened.
Lennon Remembers, Jann S Wenner
In the Anthology book Paul McCartney revealed his reaction to Lennon's decision.
I'd said: 'I think we should go back to little gigs – I really think we're a great little band. We should find our basic roots, and then who knows what will happen? We may want to fold after that, or we may really think we've still got it.' John looked at me in the eye and said: 'Well, I think you're daft. I wasn't going to tell you till we signed the Capitol deal' – Klein was trying to get us to sign a new deal with the record company – 'but I'm leaving the group!' We paled visibly and our jaws slackened a bit.
I must admit we'd known it was coming at some point because of his intense involvement with Yoko. John needed to give space to his and Yoko's thing. Someone like John would want to end The Beatles period and start the Yoko period; and he wouldn't like either to interfere with the other. But what wasn't too clever was this idea of: 'I wasn't going to tell you till after we signed the new contract.' Good old John – he had to blurt it out. And that was it. There's not a lot you can say to, 'I'm leaving the group,' from a key member.
I didn't really know what to say. We had to react to him doing it; he had control of the situation. I remember him saying, 'It's weird this, telling you I'm leaving the group, but in a way it's very exciting.' It was like when he told Cynthia he was getting a divorce. He was quite buoyed up by it, so we couldn't really do anything: 'You mean leaving'? So that's the group, then...' It was later, as the fact set in, that it got really upsetting.
During the meeting Lennon and Yoko Ono also made Klein business manager of their company Bag Productions.
After the Plastic Ono Band's debut in Toronto, we had a meeting in Savile Row where John finally brought it to its head. He said: 'Well, that's it, lads. Let's end it.' And we all said 'yes'. And though I said 'yes' because it was ending (and you can't keep it together anyway, if this is what the attitude is) I don't know if I would have said, 'End it.' I probably would have lingered another couple of years.
But when we all met in the office, we knew it was good. It wasn't sulky and we weren't really fighting. It was like a thought came into the room, and everyone said what they said. John didn't think we should leave, just that we should break it up. It was not: 'I'm leaving, you're leaving.' It was: 'Well, that's it! I've had enough. I want to do this...'
If that had happened in 1965, or 1967 even, it would have been a mighty shock. Now it was just 'let's get the divorce over with', really. And John was always the most forward when it came to nailing anything.